Enlightened Capitalism and Land Tenure

May 13, 2013

Article

Jonathan White, writing for German Marshal Fund, discusses the New Alliance for Food Security and Nutrition in the context of “Enlightened Capitalism.” Launched in 2012, the New Alliance seeks to lift 50 million people out of poverty in ten years by aligning local country plans, private sector investments, and G8 government commitments behind agriculture and nutrition in Africa. White notes that country ownership and public-private partnerships (PPP) are key to achieving the objectives of the New Alliance.

Overseas Direct Assistance (ODA) rose nearly three-fold in the New Alliance countries from 2000 to 2010, White notes. Public-private partnerships create an opportunity to link development assistance with private investment to achieve larger, more inclusive and broad-based development goals.

Work in Malawi, Ethiopia and Tanzania reveals that PPPs can connect smallholder farmers to markets, through for example, contract farming and benefit sharing models. USAID has advocated these types of models for many years; however, the key to success in the PPPs is the property rights that each partner holds, which in turn dictates who has a seat at the table during the negotiations over benefit sharing. USAID’s new Land Administration to Nurture Development (LAND) program in Ethiopia will push the boundaries of this model even further by securing the property rights of pastoral communities and linking them to private commercial abattoirs.

Dr. Gregory Myers, USAID Division Chief, Land Tenure and Property Rights says, “It is for this reason that G8 countries, under U.S. leadership in 2012 and under U.K. leadership in 2013 are supporting implementation of the Voluntary Guidelines, including increased transparency in land transactions. Doing so, will create conditions fostering private sector investment for all producers—local smallholders to large scale commercial farms—thus lifting millions from poverty.”

In his conclusions, White argues that for the New Alliance to succeed each partner needs to continue to build trust. Governments need to support “transport, electricity, water, telecommunications, and physical storage, providing stable regulation and property rights…, contributing to research and extension services, and facilitating trade through customs reforms and compliance with international standards.” Governments also need to reduce interference in markets. The private sector needs to focus on creating greater transparency, including in land transactions. White notes that the “mutual accountability” built into the New Alliance Frameworks could also help build greater trust between private and public sector actors.